Figure 23-2. -Refer to Figure 23-2.The shift of the short-run aggregate-supply curve from AS₁ to AS₂ A) could be caused by an outbreak of war in the Middle East. B) could be caused by a decrease in the expected price level. C) causes the economy to experience an increase in the unemployment rate. D) causes the economy to experience stagflation.

Question

Quizplus · Accepted Answer

A shift in the short-run aggregate supply curve to the right can be caused by a decrease in the expected price level, which makes production less costly for firms and increases their willingness to produce. The other options (A, C, and D) are not necessarily related to a shift in the short-run aggregate supply curve.

Figure 23-2. -Refer to Figure 23-2.The Shift of the Short-Run Aggregate-Supply Curve